How to Find and Use the Best Secured Credit Card

If you have moderate to severely damaged credit, finding the best secured credit card is one important way to rebuild your credit. A secured credit card is a card that is backed by a deposit.

Instructions

1

Validate that the credit card company reports to all three credit bureaus. Otherwise, you are just wasting your time. The only reason to even have this type of credit card is to rebuild your credit.

2

Search for secured credit cards online at a reputable source. See the link below for safe offers. Some banks require an extra insurance policy with a steep monthly fee. Do not be lured into this offer. Also, don't answer unsolicited secured credit card offers or ads as there are scams out there. Initiate the search for a good card yourself.

3

Research the terms. A minimum deposit of $200.00 is usually required but the bank will allow you to increase the deposit amount for a proportionately higher credit limit. The higher the credit limit, the greater impact on time payments will have on your credit score. It's okay to begin with $200.00, but that amount will need to be increased to fully realize the benefits to your credit score. You will also have to pay an annual fee with these type of cards so try to get the best rate you can.

4

Pay the amount in full off each month. You do not want to pay the credit card company interest on your own money!

5

Pay on time and never miss a payment date. Many banks allow you to set up a pre-payment schedule automatically. Put the date on your calendar and be rigorous about paying on time. You can also frequently pay by phone although there is a charge associated oftentimes. Find what works best for you and stick with it.

6

Call the credit card company to find out the amount of time it will take to get your deposit back and to have the card converted into a regular, unsecured card. Also, while you are on the phone, obtain the interest rate paid on the deposited amount.